BMW 2014 Annual Report Download - page 137
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137 GROUP FINANCIAL STATEMENTS
Past service cost arises where a BMW Group entity in-
troduces a defined benefit plan or changes the benefits
payable under an existing plan. These costs are
recog-
nised immediately in the income statement. Similarly,
gains and losses arising on the settlement of a defined
benefit plan are recognised immediately in the income
statement.
The defined benefit obligation is calculated on an actu-
arial basis. The actuarial computation requires the use
of estimates and assumptions, which depend on the
economic situation in each particular country. The most
important assumptions applied by the BMW Group are
shown below. The following weighted average values
have been used for Germany, the United Kingdom and
other countries:
31 December Germany United Kingdom Other
in % 2014 2013 2014 2013 2014 2013
Discount rate 2.10 3.50 3.40 4.40 3.48 4.46
Pension level trend 1.60 2.00 2.43 3.32 0.03 0.05
In Germany, the so-called “pension entitlement trend”
(Festbetragstrend) also represents a significant actuarial
assumption for the purposes of determining benefits
payable at retirement and was left unchanged at 2.0 %.
By contrast, the salary level trend assumption is subject
to a comparatively low level of sensitivity within the
BMW Group. The calculation of the salary level trend in
The following mortality tables are applied in countries, in which the BMW Group has significant defined benefit plans:
the UK also takes account of restrictions due to caps
and
floors.
Based on the measurement principles contained in
IAS 19, the following balance sheet carrying amounts
apply to the Group’s pension plans:
31 December Germany United Kingdom Other Total
in € million 2014 2013 2014 2013 2014 2013 2014 2013
Present value of defined benefit obligations 9,636 7,400 9,499 7,409 1,327 949 20,462 15,758
Fair value of plan assets 7,323 6,749 7,734 6,076 804 636 15,861 13,461
Effect of limiting net defined benefit asset to asset ceiling – – – – 2 4 2 4
Carrying amounts at 31 December 2,313 651 1,765 1,333 525 317 4,603 2,301
thereof pension provision 2,313 652 1,765 1,333 526 318 4,604 2,303
thereof assets – – 1 – – – 1 – 1 – 1 – 2
Germany Mortality Table 2005 G issued by Prof. K. Heubeck (with invalidity rates reduced by 50 %)
United Kingdom S1PA tables weighted accordingly, and S1NA tables minus 2 years, both with a minimum long term annual improvement allowance
USA RP2014 Mortality Table with collar adjustments projected with MP2014